Top One Per Cent More Powerful than Ever Before

Saturday 11 November 2017

COMMUNICATION

India’s independence was supposed to herald a period of economic progress based on equality and justice. So it is disturbing the know that in some respects the levels of inequality now may be even greater than in the colonial days known for their large-scale exploitations and repression.

Some indication of this is available in the recent widely discussed paper titled ‘Indian Income Inequality 1922-2014—From British Raj to Billionaire Raj’. In particular, the data relating to the share of the top one per cent of the population presented here may be very relevant, as this measure in frequently used to find out the extent of domination of an economy by a small minority.

According to this study, the share of the top one per cent (of the adult population) in national income in India was high but not unreasonably high in 1980-82 when it stood at 6.2 per cent. However, after this it increased at a very rapid rate. While the general growth of income of the entire adult population was recorded at 187 per cent during 1980-81, the income of the top one per cent grew at 750 per cent. The result was that by the year 2013-14, the share of the top one per cent in national income had increased to 21.7 per cent. This is higher than the highest share of the top one per cent recorded in times of the British Raj (for the years since 1922 for which such records are available), when the highest share of the top one per cent was recorded at 20.7 per cent in 1939-40.

While this study records data upto 2014, if the trends of jobless growth from 2014 to 2017 as well as the disruption in the livelihoods in the informal sector during 2014-17 are kept in mind, then it is likely that the share of the top one per cent has increased further during this period 2014-17.

This trend of the rapid increase of the share of the top one per cent in recent decades is a matter of serious concern as this impacts adversely on justice, democracy and prospects of broadbased growth. High priority should be accorded to checking such trends of dominance of a small minority and instead moving towards the path of equality and justice.